Search Results for: Federal Reserve

By Pam Martens and Russ Martens: August 11, 2020 ~ On January 31 of this year, researchers for the Federal Reserve released a study that showed that the largest banks operating in the U.S. have been gaming their stress test results by intentionally dropping their exposure to over-the-counter derivatives in the fourth quarter. The fourth quarter data is the information used by the Federal Reserve to determine surcharges on capital for Global Systemically Important Banks, or G-SIBs. The report, “How Do U.S. Global Systemically Important Banks Lower Their Capital Surcharges?,” was written by Jared Berry, Akber Khan, and Marcelo Rezende. We decided to evaluate this claim for ourselves, using the quarterly derivative reports provided by the Office of the Comptroller of the Currency (OCC), the regulator of national banks. The data was appalling. The largest Wall Street banks not only dropped their level of derivatives by trillions of dollars in the fourth … Continue reading →

By Pam Martens and Russ Martens: August 7, 2020 ~ Earlier this year, Wall Street On Parade reported that the Chairman of the Federal Reserve, Jerome Powell, had an upward range of $11.6 million invested with the investment management firm, BlackRock, and its iShares Exchange Traded Funds, according to Powell’s 2019 financial disclosure form. Powell’s 2020 financial disclosure form is now available. It was signed by Powell on May 15, 2020 and it shows that Powell’s holdings in BlackRock investments have reached an upward range of $24.95 million – an increase of $13.35 million over the prior year’s upward range. (See Editor’s note below.) The date that Powell signed his latest financial disclosure, May 15, is noteworthy. It means that more than 45 days after the New York Fed had hired BlackRock to manage its commercial mortgage-backed securities program and its $750 billion primary and secondary purchases of corporate bonds … Continue reading →

By Pam Martens and Russ Martens: August 6, 2020 ~ At Fed Chairman Jerome Powell’s press conference on July 29, he persisted in his explanation that all of the Fed’s bailout programs are really about helping the American people get back on their feet. Here’s one more, among a growing mountain, of reasons to question that. Sri Lanka is an island country situated in the Indian Ocean and located about 9,000 miles from the United States. Its population of approximately 21 million ranks it the size of the state of Florida. Despite those statistics, Sri Lanka somehow became the main participant in an emergency lending facility set up by the Fed. According to an official statement by the Central Bank of Sri Lanka (CBSL), “the CBSL has decided to pledge a sum of USD 1 billion worth of US Treasury Bonds held in the CBSL reserve and enter into the … Continue reading →

By Pam Martens and Russ Martens: August 5, 2020 ~ Federal Reserve Chairman Jerome Powell wants Americans to believe that the mega banks on Wall Street that hold trillions of dollars in federally-insured deposits, while peddling everything from high-risk derivatives to junk bonds to precious metals, “are a source of strength” during this economic downturn. The big problem for the Fed is the above two charts. The chart data comes from BigCharts at MarketWatch, owned by Dow Jones & Company. According to the first chart, Citigroup has lost 90 percent of its share value since January 3, 2005. (It dressed up its share price in 2011, doing a 10-for-1 reverse stock split, meaning shareholders who had previously owned 100 shares, now owned just 10 shares at a higher price.) Bank of America’s share price has lost half of its value and Morgan Stanley’s share price has been essentially flat for … Continue reading →

By Pam Martens and Russ Martens: August 4, 2020 ~ David Sirota has read the collective mind of progressives when it comes to Presidential candidate Joe Biden. On August 1 Sirota Tweeted: “Give us an anti-Wall Street Treasury Secretary and AG [Attorney General], and you can have your sh*tty VP…On the other hand, give us a sh*tty Treasury Secretary and AG and try to paper it over with a good VP, and you’ve basically given everyone the big middle finger.” There is growing concern about Biden among progressives because he has made the decidedly ill-advised move of using the infamous Larry Summers as an advisor. Summers is the man who played an outsized role in the creation of Frankenbanks on Wall Street in 1999 with his push to repeal the Glass-Steagall Act and the deregulation of derivatives in 2000 as Treasury Secretary in the Clinton administration. Carrying on the proud … Continue reading →

By Pam Martens and Russ Martens: August 3, 2020 ~ Federal Reserve Chairman Jerome Powell and Randal Quarles, the Vice Chairman for Supervision at the Fed, have stated in testimony before Congress that they would be providing transaction level details of their Section 13(3) Emergency Lending Facilities on a regular, ongoing basis. But the three oldest of those facilities, the Primary Dealer Credit Facility (PDCF), the Commercial Paper Funding Facility (CPFF), and the Money Market Mutual Fund Liquidity Facility (MMLF), which were all created more than four months ago in mid-March, have yet to release any transaction level details to the public. The Fed is required to provide reports every 30 days on its emergency lending facilities. Those reports are located at this Fed website. If you scroll down, you will find that transaction level reports have been provided for four of the Fed’s emergency lending programs. But the three programs … Continue reading →

By Pam Martens and Russ Martens: July 29, 2020 ~ The very reliable GDPNow forecasting model provided by researchers at the Atlanta Fed was just updated this morning and currently predicts that Gross Domestic Product (GDP) in the United States contracted by a jaw-dropping -32.1 percent on a seasonally-adjusted, annualized rate in the second quarter. The public will get the official number from the Bureau of Economic Analysis (BEA) at the U.S. Department of Commerce at 8:30 a.m. tomorrow morning.  It’s expected that the second quarter GDP number will be the largest decline since quarterly GDP records began being compiled by the BEA in 1947. It is also expected that the number will be exponentially worse than any quarter during the Great Recession of 2007 to 2009. As the chart above indicates, after the precipitous economic declines in April and May, resulting from the effects of business closures and layoffs … Continue reading →

By Pam Martens and Russ Martens: July 28, 2020 ~ Last Friday, the New York Times officially embarked on what we have been expecting – an attempt to rewrite the current, ongoing Wall Street bank bailout. We were so certain that an alternative reality was going to emerge at the Times, that we had the foresight to create an archive of Wall Street On Parade articles (122 so far) that document every major bailout step the Fed has taken since September 17, 2019 – five months before the first COVID-19 death was reported in the United States. One of our articles, published on January 6, 2020, shows that before the first COVID-19 case had even been reported in the U.S., the Fed had pumped more than $6 trillion cumulatively into the trading units of the largest Wall Street banks — not hedge funds, that the Times now attempts to blame … Continue reading →

By Pam Martens and Russ Martens: July 27, 2020 ~ As Americans wake up each day to the new dystopian normal and reports of another corporate or Wall Street bailout (no doubt at the urging of the corporate lobbyists that have embedded themselves in the Trump administration), there is widespread agreement that big corporations have too much power and control in America. America was founded on blowback to the tyrannical restraints on average Americans’ lives by King George III. Now we have multinational corporations pushing us around while bleeding the U.S. Treasury, mushrooming the national debt, and thus creating an even greater dystopian threat to our children’s generation who will inherit that crippling debt pile. Against this backdrop comes a very welcome new book from David Dayen: Monopolized: Life in the Age of Corporate Power. Dayen is Executive Editor of American Prospect and one of the most admired and prolific … Continue reading →

By Pam Martens and Russ Martens: July 24, 2020 ~ On June 24 Bloomberg News reporters Lisa Lee and Shahien Nasiripour dumped a bucket of cold water on Fed Chairman Jerome Powell’s official narrative that the mega Wall Street banks are “well capitalized” and a “source of strength” in the pandemic. The Federal Reserve, and particularly the New York Fed which wore blinders leading up to Citigroup’s blow up in 2008, are walking a delicate tight rope in reassuring the public that all is well under their watch versus what any first year accounting major can see is happening on the mega banks’ balance sheets. The Bloomberg News article revealed the following about the dividends and stock buybacks at Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo: “From the start of 2017 through March, the four banks cumulatively returned about $1.26 to shareholders for every $1 they reported in net … Continue reading →